You have not always lived in California. When your own parents passed away, you remember that they had to pay estate taxes in their state, and it really cost them. As you start doing your own estate planning decades later, you wonder if you will need to pay these taxes to California.
You will not. There are no state-level estate taxes. It does not matter how large or small your estate is, what types of assets you control, how many heirs you have or what estate planning tools you use. There are no California estate taxes.
In fact, California is in the majority here. Out of the 50 states, 38 of them have no estate taxes at the state level.
That said, do not assume you won’t have to plan for taxes at all. Do you own real estate in another state, like Kentucky? If so, while California also does not have an inheritance tax for your heirs, Kentucky does, and they may need to pay on that property.
Another thing to consider is that the federal government has its own taxes. For example, California does not have a gift tax. You can leave gifts without worry. The federal government, though, taxes gifts that exceed $15,000. Make sure you consider all types of federal taxes that may apply to your estate, even when it seems like California is not interested in interfering at all.
Situations like this can get complex, and you want to do careful planning to set things up for your heirs. It’s important to know about all of the options and estate planning tools you have.